Consider the following bank balance e sheet (fixed rates and pure discount securities unless indicated otherwise).Interest rates on liabilities are 4 percent and on assets are 6 percent.

Duration $billions (years Assets Prime-Rate Loans (rates set monthly) 325 2-Year Car Loans 275 2.0 30-Year Mortgages 400 7.0 Total Assets (A) 1,000 ? Liabilities and Equity Super Now Checking Accounts (rates set monthly) 350 1.0 6-Month Certificates of Deposit 250 .5 3-Year Certificates of Deposit 300 3.0 Total Liabilities (L) 900 Equity (E) 100 Total Liabilities (L) and Equity (E) 1,000